Social Media for Business: What’s the ROI?

You’ve heard it all before. Your boss (or son, daughter, business partner, marketing director, franchise owner, etc.) is telling you that your company needs to embrace social media, and fast. But, why? And, what will it do for you?

Does social media pay? Short answer – it can!

The reasons are the same as for any business move: To save money, improve customer service and to generate revenue. Social media is particularly helpful for the latter, but it doesn’t happen overnight.

How Does Social Media Generate Revenue?

Slowly and steadily, though new customers, building customer loyalty, and increasing transaction amount and frequency.

What Else Can Social Media Do for Us?

I’m glad you asked! There are several advantages that don’t directly impact the bottom-line to consider as well:

How do I know if it is working?

Excellent question! We assume you are already keeping track of metrics such as website traffic, sales revenue, number of transactions, net new customers, phone inquiries and website inquiries.

With those numbers in-hand, give your social media campaign several months to gain traction, then look at the above mentioned figures. Assuming all other factors are relatively stable, you can fairly attribute all your gains to social media. There are also more direct ways to track:

Consider offering social media-only discounts. When you use a code (“mention code ‘FBFan1′”), you can directly track sales.

Ask new customers how they heard about you. This one is tricky, since they may have seen you several places before deciding to come in. So, you may ask directly, “Have you seen us on Google, Facebook, Google Plus or Twitter?”

Use a dedicated phone number for all things social media. You can use an existing number if you have call reporting, or use a virtual number that forwards to an existing number. We like Ring Central for virtual numbers and reporting.

Ask your webmaster or social media company to set up social goals in Google Analytics. This helps track goals such as Email signups, document downloads, contact form submission and their source.

What Next?

Look at what is working and what isn’t. For example, if you are getting more website traffic, but few new customers, let your social media team know. They can tweak their approach to get the results you want.

What if Nothing is Working?

Even with a fully managed plan, some input by the business owner is required to get the best results. Have you been diligent about supplying local information to your Community Manager? Are you keeping them in the loop about all the great local events/fairs/conferences/seminars/contests/prizes/specials/polls that are going on? Is there someone in the office who can be assigned to this task?

Have you given it enough time? It can take 6-12 months to start seeing results.

Are you participating online? Commenting on, liking and sharing your business page’s content might feel like cheating, but it isn’t! If you don’t care enough to get involved, why should your customers or friends? As your connections see you engaging, they may start to take notice as well.